Collective Redundancies: Employers' Duty to notify the Secretary of State

Collective Redundancies: Employers' Duty to notify the Secretary of State

March 2006

Introduction

1. Thompsons welcomes the opportunity to respond to the DTI consultation paper (issued on 20 March 2006) on how UK law requires amendment to come into line with the 27 January decision of the European Court of Justice in Irmtraud Junk v Wolfgang Kuhnel (Case C-188/03).

2. Thompsons is the UK’s most experienced trade union, employment rights and personal injury law firm. It has a network of offices across the UK, including the separate legal jurisdictions of Scotland and Northern Ireland. Thompsons’ specialist Employment Rights Unit (ERU) acts only for trade unions, employees and workers and the ERU has acted in many of the leading employment rights cases, advising extensively on UK and European law developments.

3. We note and agree with the proposal to amend section 193(1) and (2) of the Trade Union and Labour Relations (Consolidation) Act 1992, expressly to require employers to notify the Secretary of State of proposed collective redundancies before they give notice of redundancy dismissals.

4. However, we would point out that the current wording of those sub-sections (“at least” 30/90 days before the first dismissal takes effect) could be interpreted so as to import the notion that notices should post-date notification to the Secretary of State. Granted, such interpretation is not inevitable or the sole one possible, but nor is the interpretation the Consultation Paper suggests for section 188(1A). We consider that the opportunity should be taken to remove all uncertainties over the meaning of our legislation. In this respect, we have a number of concerns.

Section 188(1A)

5. Paragraph 2.19 of the Consultation Paper says that since the ECJ was able to interpret the phrase “in good time” (appearing in Article 2.1 of Directive 98/59/EC) in a particular way, it follows that section 188 of TULR(C)A “can therefore be similarly understood, to there is no need to amend that particular provision”. However, while this argument is possible as a matter of legal theory, it sits uneasily with the proposed amendments to section 193. The 1992 Act would be left with an inconsistency between the latter section (which would make express provision for the first redundancy notice of dismissal to follow the completion of the consultation) and the former section (which would rely on Tribunals interpreting the provision in only one way). This creates the possibility that an employer or a Tribunal, faced with such a contrast, would conclude that the proposed additions to section 193 import something that is not in section 188, leading them to adopt a different interpretation of the latter provision.

6. It is not adequate for the DTI to suggest that there is no “need” to amend section 188. It would make for clarity and simplification of the legislation if the two sections were, in this common respect, to read consistently, rather than rely in one case on a meaning being drawn from case law.

7. There is another reason why section 188(1A) should be amended. That is to clarify when the consultation must be completed. We agree with the DTI’s analysis at paragraph 2.19 of the consultation document that “…Though the statute does not specify a particular end point for those consultations, the phrase “in good time” must be construed in the light of the Junk judgment as meaning that consultations are commenced in time for them to be completed before notices of dismissal are issued.”

8. But that point appears to have been missed, or at least not referred to, by the Employment Appeal Tribunal in Leicester City Council v Unison [2005] IRLR 920, where the EAT’s view was apparently that the period of consultation only had to begin before the first notices of dismissal were issued. Whilst we believe that the position is correctly addressed in the DTI guidance, it should also be clarified in section 188.

“Proposing/contemplating to dismiss” or “give notice of dismissal”

9. It is also unfortunate that the Government does not propose to take this opportunity to remove another inconsistency, one which on established authority places the UK in breach of its obligations under European law. This is the divergence between “proposing to dismiss” in section 188(1) of the 1992 Act and “contemplating collective redundancies” in Article 2.1 of the Directive.

10. There is no doubt that the two provisions are inconsistent, nor that on that account the UK is currently in breach of its obligation properly to implement the Directive. In MSF v Refuge Assurance plc (2002) IRLR 324, the Employment Appeal Tribunal ruled that section 188(1) cannot be construed to accord with Article 2(1) of the Directive. The EAT held that the latter means the point at which the employer first envisages that he may have to make employees redundant and has in view, at least as a contingency, that the numbers, the period and the establishment(s) would, if it came to pass, make the exercise amount to a collective redundancy. In contrast, “’proposes’ relates to a state of mind which is much more certain and further along the decision-making process than the verb ‘contemplate’”.

11. It would provide for clarity and simplicity if section 188 were to be amended by replacing “proposing to dismiss” with “contemplating dismissing”.

12. The added advantage is that such an amendment would bring section 188 into line with paragraph 1(1) of Schedule 2 of the Employment Act 2002, the Dismissal and Disciplinary Procedures. That provision requires the employer to provide written information to an employee about the conduct etc “which lead him to contemplate dismissing or taking disciplinary action against the employee” (emphasis added).

13. This is doubly important, since regulation 4(1)(a) of the Employment Act 2002 (Dispute Resolution) Regulations 2004 provides that the DDP does not apply where the (contemplated) dismissal is one to which section 188 of the 1992 Act applies. However, given that “contemplating” dismissals occurs earlier than “proposing” dismissals, the employer currently is faced with triggering the DDP where he/she has not yet reached the stage envisaged by section 188. This is likely to cause confusion and can be easily avoided by bringing the two provisions into line with each other and with the Directive. Employers and trade unions will know where they stand and unnecessary litigation can be avoided.

14. To give effect to that part of the EAT’s judgment in the Leicester City Council case, we also believe that amendment is required to show that the obligation to consult is triggered when an employer “contemplates giving notice of dismissal”. The EAT did not see this construction as straining the language of section 188. But this was only after earlier confusion in the authorities: see NUT v Avon City Council [1978] IRLR 55 and Middlesbrough Borough Council v TGWU [2002] IRLR 332.

15. For all of the above reasons, section 188 should be amended to make it reflect the effect of the Junk case that:

(i) the obligation to consult is triggered when the employer is “contemplating”;(ii) “issuing notices of dismissal” to 20 or more employees; and(iii) the consultation shall begin in good time “and shall be completed” at least the relevant number of days before “the first notice of dismissal is issued”.